SBC to axe 13,000 jobs in AT&T merger

Please hang up now

US telecoms giant SBC is to axe 13,000 workers in its $16bn (£8.5bn) acquisition of former parent AT&T.

Details of the job cuts were contained in slides accompanying a briefing explaining the deal.< Some 5,100 jobs are to be lost in sales and business and 5,100 are to go at the engineering divisions. Around 2,600 admin jobs - including HR, PR, legal and advertising - are also to be wiped out.

SBC employs 163,000 workers, while AT&T has 47,000. On completion of the job cuts, the enlarged group expects to employ around 197,000 staff. The redundancies will contribute "more than $15bn (£8bn) in synergies with more than 85 per cent coming from cost reductions", the company said.

Execs also reckon they can save more than $500m ($265m) a year by delivering IT synergies, which are "achievable and significant".

The mega-merger between SBC and AT&T was announced on Monday after being agreed at the weekend.

SBC is a local specialist in the US. It has 52m access lines and 5.1m DSL customers with its broadband network covering 77 per cent of its local customer locations. It owns 60 per cent of US mobile firm Cingular which has 49m subscribers.

AT&T works at the other end of the market - it serves almost every member of the Fortune 1000. Its global network covers 50 countries and it has 26 internet data centres, 13 in the US and 13 across the world. It also claims the "world's premier communications research organization, AT&T Labs".

Edward Whitacre, SBC chairman and chief exec, who will lead the new company, said: "The communications industry is undergoing a profound transformation as it transitions to unified, IP-based networks capable of delivering a host of integrated services.

"To manage this evolution, customers need a partner with the resources to provide new service platforms and product sets, while maintaining world-class reliability and security. This merger creates that company."

He promised the new company would regain America's lead in communications. ®